Insurance Caselaws

In insurance claims, the NCDRC orders LIC to pay Rs. 6 Lakhs plus a bonus, stating that as a PSU, LIC must fulfill its obligations.

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Case Title: Life Insurance of India Ltd. vs Geeta Madhavrao Damahes & 2 Ors.

Summary

The National Consumer Disputes Redressal Commission (NCDRC) denied Life Insurance of India's (LIC) Revision Petition and affirmed the State Commission's ruling. The court ruled that LIC, as a public sector insurance company, is obligated to pay the entire policy amount, despite the complainant's initial claim for a diminished sum. It ordered LIC to make an incentive payment of Rs. 6 lakhs.

The complaint was filed against the State Consumer Disputes Redressal Commission, Maharashtra, Circuit Bench's order, which challenged the decision of the District Consumer Disputes Redressal Forum, Nagpur. The deceased spouse of the complainant acquired a Jeevan Mitra policy guaranteeing a sum of 2 lakh rupees. LIC denied the assertion, claiming the decedent had neglected to divulge critical health details during the policy's acquisition. The District Commission determined that LIC's denial of the claim was unwarranted and ordered LIC to remit the policy sum of Rs. 2 Lakhs plus 6% interest. The court awarded Rs. 10,000 as compensation for mental distress and incompetence in service, as well as Rs. 10,000 for litigation expenses.

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